Many self-employed Florida residents are eager to start their businesses. The simplest and most rational solution to this issue is to join the ranks of sole proprietors.
Organizing and managing a business in this format is the least difficult in America and has no service pitfalls. Although, future business owners will have to adhere to certain norms. Also, be prepared that you will have to face some restrictions regarding the functions of your sole proprietorship.
So, the main task of this manual is to help you answer the essential question – is the business format of an individual enterprise right for you? And, of course, we will tell you which aspects to pay attention to while opening a sole proprietorship and how to set up a business structure in this vein properly.
The Proper Way To Start Business As The Florida Sole Proprietor
There is no algorithm for organizing the business work of an individual entrepreneur in Florida as for LLC. In addition, the state does not charge additional service fees for the formation or management of this type of business or company. Are you looking to become an individual business owner and start a sole proprietorship in Florida? – Just start working!
Though, you still have to go through several additional legal formalities. These service stages are optional. Although many sole proprietors prefer not to neglect them, compliance with these formalities guarantees the legal protection of their interests.
Applying For DBAs
Almost every company and business owner prefers doing business as a DBA. There are many benefits to running a business under an assumed name compared with an entity or LLC. We are talking primarily about creating the business image of your company. Potential clients and consumers will find this approach more professional and give you more confidence. It turns out that a company that uses the real name of its owner is often not competitive.
Let’s clarify that a company owned by sole proprietors can use the DBA to open and manage a business bank account. Customers will appreciate it as one more advantage in favor of the business owner, so they feel more comfortable.
If you have a business in Florida and want to get a DBA, you need to check its availability. To do this, refer to the Secretary of State’s database of fictitious names. Is the chosen trade name not used by another company in Florida? – Then, you can proceed with the registration procedure! The easiest way to do this is to apply with the Fictitious Name Registration with the Florida Secretary of State. So, mail in a paper application or file it online.
To ensure that the process of assigning your DBA company in Florida goes smoothly, check out our complete guidance! Here you will find the essential nuances on this topic.
Clarification & Compliance with Tax Requirements
You can run your business in this format and not hire third-party employees. In this case, you do not need to obtain an EIN (Federal Tax Identification Number) because your Social Security number will replace it. Of course, it would be correct to take care of your confidentiality and still use the EIN and not the SSN.
The nature and the structure of the business activity of individual entrepreneurship determine the list of tax requirements that the state will put forward (as with LLC).
The nature of your business largely determines the list of tax requirements that you need to fulfill. It is essential to stick to this list clearly, as there are some types of taxes that you should not pay.
Typically, Florida companies that sell merchandise or products are usually subject to sales and use tax. To register for these types of business taxes, business owners must complete Form DR-1, Florida Business Tax Application.
The fact of filling out and submitting this form indicates the registration of the company with the Florida Department of Revenue. In addition, the owner will have access to a complete personalized list of tax requirements. Submit this form online or by mail.
Business Licenses & Permits
Florida sole proprietors are exempt from the need to purchase a general business license. However, each of them must take care of obtaining many other licenses and/or permits. The law puts forward different licensing requirements for different types of businesses.
Florida has a lot of requirements for business owners! In order not to get confused in this matter and to avoid troubles associated with deliberate default on your obligations, refer to the Florida Department of Business and Professional Regulation’s businesses and professions search. It is the only way to figure out which licensing requirements you must comply with and which not.
Along with the state licensing requirements, business owners need to take care of local licenses (city or county). It is an important issue that should not be overlooked.
As with tax requirements, the nature of your business determines the individual list of licenses and claims that you will need to obtain. Have a look at the giant cities of Florida:
They have individual licensing and permitting rules. It also applies to customs and tax requirements.
Florida Sole Proprietor: The Notion & Essence
A sole proprietor is not a legal entity! But any corporation and limited liability company (LLC) has this status. As a sole proprietor, you run the business alone (register and manage it on your behalf). It is worth noting that this gives the business owner advantages, though, imposes additional obligations and responsibilities on him.
Make Sure to Pay Attention to the Following Three Aspects
There are obligations to pay taxes to the state
A business owner and an individual entrepreneur are the same people. It means that filing tax returns is not a requirement, as with an entity or LLC. You need to declare your income and expenses and fill out the declaration of an individual;
Business owners who are registered as sole proprietors have the right to enter into contracts on their behalf, unlike an entity. Also, receiving profit from clients, in checks they can indicate their name in the recipient column;
Flexible terms of business management
The advantage difference between individual entrepreneurship and any entity is the ability to combine work and personal assets. Whereas corporations and LLCs must separate personal assets from company assets. It has several positive and negative aspects. For example, if you have financial difficulties, creditors can seize or confiscate your personal property (house, car, etc.). In the case of corporations and LLCs (or any entity), creditors do not have this freedom, as their powers only apply to business assets.
Of course, the structure of doing legal business as a sole proprietor is greatly simplified while in Florida. You don’t even have to pay any commission fees provided for the entity or LLC. At the same time, based on the nature and structure of the business activity that you conduct, you will all have to go through a series of entity stages.
The issues of taxation, obtaining licenses, and permits require more detailed consideration. Also, pay attention to the possibility of obtaining and using DBA. These aspects are vital, as their omission can result in unnecessary legal penalties for you.
We have prepared this manual so that you can think over the structure of your business to the smallest detail. Manage it correctly and get more legal profit!